IKEA tackles tricky terrain

Development of the hotly anticipated IKEA furniture store in south suburban Centennial is on track, but fit-ting the 400,000-square-foot store on its small, hilly site off I-25 is proving tobe a challenge.

After years of speculation, the European retailer announced in September 2008 that it planned to build its first Colorado store in Centennial.

IKEA previously considered building a store in neighboring Lone Tree, but the city turned it down in 2004 over design issues. IKEA’s signature bright blue-and-yellow store colors didn’t meet city design guidelines.

The Centennial store will take up most of its 13.5-acre site, which sits between Interstate 25 and South Dayton Street, according to site plans. It will be rougly one-quarter the size of the neighboring, 1.63-million-square foot Park Meadows mall, metro Denver’s second-largest shopping center.

“This is a very complicated project, and will take some time,” said Joseph Roth, spokesman for IKEA Group’s U.S. headquarters near Philadelphia. “There’s still no time frame for groundbreaking or opening, but we are committed to the project and moving forward.”

Once a construction timetable is fixed, the store will take 18 months to build, according to Roth. The store will provide roughly 500 construction jobs, and employ 400 people once it’s open.

The IKEA Group, based in The Netherlands, is the world’s largest furniture retailer as well as a “global cult brand” because of its low-cost, trendy products and limited number of stores, according to retail trade groups. Thousands of people show up at store openings.

The chain specializes in ready-to-assemble furniture, which appeals to college students and young couples on a budget, but has been criticized as hard to put together. Some IKEA critics also don’t like the huge amounts of traffic the stores can generate in surrounding neighborhoods.

Privately held IKEA Group reported total 2008 sales of 21.1 billion euros, or $31.33 billion. The company has roughly 300 stores worldwide, including 37 in the United States.

“They’re one of the few companies that hasn’t [built too many stores]; they’ve maintained the ability to be a true destination store,” said retail consultant Larry Black of Black Ink Results in Evergreen. “That allure … is part of their mystique. The other part is their value proposition. Because of the economy, you have far more local buyers who would be IKEA buyers than five years ago.”

Centennial’s IKEA will attract shoppers not only from the metro area, but also from Colorado Springs, Fort Collins, Cheyenne, Wyo., and beyond, Black said.

The local IKEA site’s hilly, sloping terrain presents challenges as well for a store that will include four levels. Plans by design-services firm CLC Associates Inc., which has a Denver office and also worked on IKEA’s store in Draper, Utah, show the Centennial IKEA will include two levels of parking, one below ground level, with two store levels — a warehouse and showroom — on top.

“The site is topographically challenged. … The site work and preparation will take longer than normal,” Roth said.

This project, unlike many other commercial developments, doesn’t have to worry about convincing a bank to give it a construction loan. “We self-fund projects. … We use our own capital,” Roth said.

IKEA is looking for architects, contractors and engineers to finalize plans for the store, Roth said. The retailer already has gotten all the approvals it needs from the City of Centennial and purchased its land.

“We continue to work with the IKEA team … as they need additional information,” said Wayne Reed, director of planning and development for the City of Centennial. “Centennial is doing everything it can to have a store here.”

The site is worth its challenges because it’s just the kind of location IKEA likes, with its proximity to a highway and two major intersections as well as other retail properties, such as the Centennial Promenade shopping center and Park Meadows mall, according to retail experts.

“They like to be at a confluence of both transportation and retail activity,” Black said.

Residents near the IKEA site have been concerned about increased traffic the new store will generate, but Centennial officials contend existing roads will support the average 3,500 cars a day estimated to go to the store, according to city reports. Roughly 60 percent of that traffic is expected to come from I-25.

Streets feeding into Dayton Street, the street closest to the store, include East Mineral, East Nichols and East Otero avenues as well as South Chester Street.